The demolition of nine houses at Amona, a hilltop enclave in the heart of the West Bank, was seen as a test for acting Prime Minister Ehud Olmert, who has said he would act with determination against settlers violating the law.

Olmert is widely expected to withdraw from more areas of the West Bank and dismantle additional settlements, whether unilaterally or in a deal with the Palestinians, if elected prime minister in March elections.

Medics said they had treated 162 people wounded in the clashes. Police said 58 officers had been hurt. At a field clinic, people milled about with their heads wrapped in bandages and wearing T-shirts splattered with blood.

The confrontation at Amona, one of dozens of illegal outposts established since the 1990s, began Wednesday morning, after Israel’s Supreme Court rejected a final appeal by the settlers. The court ordered nine houses in Amona, built on private Palestinian land, to be demolished. The remainder of the outpost, inhabited by about 35 families living in cramped trailer homes, was not yet being cleared.

The clashes at the Amona settlement outpost were on par with the most violent scenes during last summer’s pullout from Gaza and parts of the West Bank, in which 25 settlements were dismantled.

Eventually, the helmeted officers got up on the roofs, wrestled with demonstrators and took them down in the same bulldozer shovels. By noon, the first of nine homes in Amona were being demolished by bulldozers.

Dozens of people were injured, and more than 40 rioters were arrested. Israeli media said more than 50 police officers were among the injured, including one who was in serious condition. Two right-wing legislators were hurt on the side of the protesters.

Israeli Defense Minister Shaul Mofaz said troops were determined to clear out the settlers. “This conflict has to end with one bottom line, that we enforce law and order against the rioters,” Mofaz told Israel Army Radio.

Amona is one of dozens of outposts set up by settlers in the past decade to prevent the creation of a future Palestinian state. Israel has promised to dismantle two dozen outposts as part of its road map obligations.

However, since the launch of the road map in 2003, the evacuation of outposts has been bogged down in legal maneuvering, and a government report said Israel was not doing enough to meet its commitments. Some government ministries were even funneling state funds to the outposts.

The Palestinians hope to set up a state in areas Israel captured in 1967, which include the West Bank, Gaza Strip and east Jerusalem.

Thousands of protestorsIn all, some 5,000 demonstrators, including 1,800 extremists holed up in the nine buildings, were being forcibly removed.

Thick black smoke from burning tires rose into the air. Club-wielding soldiers on horseback charged into the crowd and water cannons tried to push back protesters. A field clinic was set up to treat the wounded, and people milled about with their heads wrapped in bandages and wearing T-shirts splattered with blood.

Troops began moving into the outpost after Israel’s Supreme Court cleared the last hurdle to the evacuation Wednesday morning.

Election ramificationsThe Israeli government, meanwhile, said it froze this month’s transfer of $45 million in tax rebates and customs payments to the Palestinian Authority while it reviews its options following the Hamas victory in Jan. 25 elections.

The United States and the European Union also have said millions of dollars in aid could be in jeopardy unless Hamas renounces violence and recognizes Israel’s right to exist.

Palestinian officials warned that without the money, they won’t be able to pay the salaries of 137,000 government employees, a large chunk of the work force. Palestinian Economics Minister Mazen Sinokrot said Israel had “no right” to freeze the tax funds but said negotiations with Israel over the issues were continuing Wednesday.

Also Wednesday, Egyptian officials said their country would send
a strong message to Hamas
to recognize Israel, disarm and honor past peace deals — the latest sign of Arab governments pushing the militant group to moderate its stance after its surprise election victory.

“Nobody will talk to them before they stop violence, recognize Israel and accept (peace) agreements, including the road map,” the chief of Egypt’s intelligence, Omar Suleiman, told journalists in Cairo. The U.S.-backed road map outlines a series of steps to be taken by Israelis and Palestinians in preparation for the creation of a Palestinian state.

In the Gaza Strip, an explosion blew out the walls in the home of Suleiman Abu Mutlak, a former Palestinian security official, but caused no injuries. Abu Mutlak blamed Hamas for the blast, the first attack on a leading figure in the defeated Fatah Party since Hamas’ victory. Hamas denied involvement.

A failure to pay the January salaries could pose the most difficult test yet for Hamas, which has resisted international demands to recognize Israel, disarm and renounce violence. Many Palestinian families depend on a government salary.